RE UDL HOLDINGS LTD AND OTHERS

RE UDL HOLDINGS LTD AND OTHERS

The court sanctioned the proposed Modifications to the Schemes for UDL Holdings Limited and 23 of its Scheme Participating Subsidiaries but could not sanction the Modifications in respect of Universal Dockyard Limited because the liquidators had not consented; the Disputed Assets of Dockyard (Unencumbered Assets and Accounts Receivable not transferred or realised) are assets of Dockyard in its winding up and are not to be dealt with pursuant to the Schemes or Modifications; scheme creditors may prove in the liquidation for any shortfall after what is recoverable under any trust arising from assets actually vested in Newco.

Citation
RE UDL HOLDINGS LTD AND OTHERS
Parties
Scheme Company: UDL Holdings Limited; Scheme Participating Subsidiary / in Liquidation: Universal Dockyard Limited; Scheme Administrator / Petitioner: Matthew Finbarr O'Driscoll; Liquidators of Universal Dockyard Limited: Simon Richard Blade and Bruno Arboit; Opposing Creditor: Fonfair Company Limited; Opposing Creditor: Showa Leasing (Hong Kong) Limited; Major Shareholder / Proposed Purchaser Under Global Solution: Harbour Front Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
7 June 2006
Case Number
HCMP414/2000
Procedural Posture
Petition Under Section 166 Companies Ordinance for Sanction of Modifications to Schemes of Arrangement and Summons for Directions in Winding Up Under Section 200(3) / Judgment Delivered on 7 June 2006 Following Hearings on 9 March and 18 April 2006
Outcome
Modifications sanctioned for UDL Holdings Limited and 23 Scheme Participating Subsidiaries; petition in respect of Universal Dockyard Limited adjourned; liquidators' summons granted in part with directions that the Disputed Assets constitute assets of Dockyard in the winding up
Legal Topics
Scheme of Arrangement Modifications, Winding Up and Asset Allocation, Creation and Scope of Trusts Under Restructuring Arrangements, Consent Requirements of Company/liquidator for Scheme Variation, Disclosure to Creditors, Voting and Conflicts of Interest
Source Language
EN
Company Law Insolvency Trusts Civil Procedure Scheme of Arrangement Modifications Winding Up and Asset Allocation Creation and Scope of Trusts Under Restructuring Arrangements Consent Requirements of Company/liquidator for Scheme Variation +2 more

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Parties

UDL Holdings Limited

Scheme Company

Universal Dockyard Limited

Scheme Participating Subsidiary / in Liquidation

Matthew Finbarr O'Driscoll

Scheme Administrator / Petitioner

Simon Richard Blade and Bruno Arboit

Liquidators of Universal Dockyard Limited

Fonfair Company Limited

Opposing Creditor

Showa Leasing (Hong Kong) Limited

Opposing Creditor

Harbour Front Limited

Major Shareholder / Proposed Purchaser Under Global Solution

Procedural Posture

Petition Under Section 166 Companies Ordinance for Sanction of Modifications to Schemes of Arrangement and Summons for Directions in Winding Up Under Section 200(3) / Judgment Delivered on 7 June 2006 Following Hearings on 9 March and 18 April 2006

Legal Issues

  1. 1 Whether the court should sanction the proposed modifications to 25 schemes of arrangement under s166 Cap.32
  2. 2 Whether Universal Dockyard Limited's Unencumbered Assets and Accounts Receivable (the Disputed Assets) are assets of Dockyard in liquidation or held on trust for scheme creditors under the Schemes
  3. 3 Whether the consent of Dockyard's liquidators (or the company) is required to sanction modifications to an existing sanctioned scheme

Ratio Decidendi

The court sanctioned the proposed Modifications to the Schemes for UDL Holdings Limited and 23 of its Scheme Participating Subsidiaries but could not sanction the Modifications in respect of Universal Dockyard Limited because the liquidators had not consented; the Disputed Assets of Dockyard (Unencumbered Assets and Accounts Receivable not transferred or realised) are assets of Dockyard in its winding up and are not to be dealt with pursuant to the Schemes or Modifications; scheme creditors may prove in the liquidation for any shortfall after what is recoverable under any trust arising from assets actually vested in Newco.

Court Disposition

Modifications sanctioned for UDL Holdings Limited and 23 Scheme Participating Subsidiaries; petition in respect of Universal Dockyard Limited adjourned; liquidators' summons granted in part with directions that the Disputed Assets constitute assets of Dockyard in the winding up

Orders

  • Sanction granted to the Modifications to the Schemes of Arrangement in respect of the Company and 23 Scheme Participating Subsidiaries
  • The petition relating to the Modifications of Universal Dockyard Limited's Scheme is adjourned to a date to be fixed, not earlier than 28 days, for the liquidators to ascertain the wishes of Dockyard's creditors